LUDLOW – The United States Department of Housing and Urban Development has awarded a HAPHousing capital grant of $4,439,300 and rental subsidies totaling $434,100 to convert the Stevens Memorial Building on Chestnut Street into affordable rental housing for seniors.

Selectmen Chairman William E. Rooney said the Board of Selectmen put out a request for proposals for redevelopment of the Stevens Memorial Building, and HAP was one of the agencies which responded.

State legislators, U.S. Rep. Richard Neal and HUD worked together on this, Rooney said.

“It is good when different branches of government work together for the benefit of seniors,” he added.

The HUD funds will cover much of the development cost and HAPHousing will be applying to the Massachusetts Department of Housing and Community Development for additional financing.

The HUD rental subsidies ensure that residents will pay an affordable rent based on their income.

Construction could start in the fall of 2011 at the earliest.

Plans for redevelopment of the building include adding a floor within the existing envelope of the building, increasing the building to 31,680-square-feet on four levels and creating 27 one-bedroom apartments and one studio apartment.

Rooney said the building which will be renovated has played a crucial historical role in the town.

Located in the center of town at 12 Chestnut St., the three-story 23,760-square- foot building was built in 1905 as a recreation facility for employees of the Ludlow Mills. The building was sold to the town in 1949 and served as the Boys & Girls Club for 53 years, until a new Boys & Girls Club was built. The building has been vacant since 2001. HAPHousing was named preferred developer in January 2008.

Rooney said the building is advantageously located across the street from the Ludlow Senior Center which offers services to seniors including outreach, information and referral, recreational activities, computer classes, meals, transportation and health screening.

HAPHousing will retain the existing brick facade of the building and will add an elevator and ramping, making all units and common spaces accessible.

The building will include multiple green features to foster energy efficiency.